Vegas men accused of running fraudulent Legal Aid program

The State Bar of Nevada and two Las Vegas women filed a class action lawsuit against two men, accusing them of running sham "Legal Aid" programs, practicing law without a license and victimizing people facing eviction from their apartments.

In a Clark County District Court suit, the State Bar accused William Chapman and Robert Lustig of masquerading as attorneys, soliciting, advertising and collecting fees for legal services they aren't authorized to provide and deceiving the public by using names for their services that are deceptively similar to legitimate non-profit assistance groups.

The State Bar is an agency of the Nevada Supreme Court that regulates lawyers.

The State Bar, through its Consumer Protection Committee, accused Chapman and Lustig of fraud when they allegedly operated without a license and allegedly prepared bankruptcy petitions without being licensed attorneys.

"The problem is that these entities are flat out defrauding people, preying on people who are about to be evicted, and then leaving them in a lurch," said Assemblywoman Barbara Buckley, the plaintiff's attorney.

"This is nothing but a scam... It is egregious. The defendants are using our name to defraud people, to con them into paying for services they may not need. They have to be stopped," she said.

A hearing on the State Bar's motion for preliminary injunction is set for Nov. 29. The suit said the Bar's co-plaintiffs, Rose Woods and Jurietta Jones, who both received eviction notices and were allegedly told by Chapman to file for bankruptcy as a remedy to halt their eviction proceedings, were evicted after paying the defendants and taking their legal advice. "At this point, these two individuals will serve as class action members for the rest of the class. We will be conducting discovery to find out how many people are affected," Buckley said. "Potentially, there could be hundreds. But we won't be able to tell until we have subpoenaed their records to find out how many people they performed such services on."

The suit said Chapman and Lustig advertised their services under the names Desert Heat Legal Group, Legal Aid Alternative, Legal Aid of Nevada, Tenants Rights and The Paralegal Center.

The suit said the defendants are tenants leasing office space with JBS Executive Suites LLC at 500 North Rainbow Suite 300 and with Tech Center Executive Suites at 2431 Tech Center Court.

The State Bar identified Clark County Legal Services Program Inc., previously known as Clark County Legal Aid Society, and Nevada Legal Services as two legitimate non-profit organizations that provide free legal services to low income people families. Both organizations can be reached at 386-1070.

"None of the companies we've listed as defendants are legitimate. We haven't done a complete investigation on all the other organizations that call themselves 'Legal Aid' yet. But we will be conducting full discovery on this," said Daniel Ebihara, another attorney representing the plaintiffs.

The suit said the plaintiffs were given the number 702 383-9696 when they called directory assistance for the number for "Legal Aid," and were required by a recorded message to leave their name and number if they had an eviction notice.

The Sprint phone book has nine Legal Aid listings -- Buckley said they are all operated by Chapman and Lustig.

Legal Aid, Nevada Legal Aid, Legal Aid in Nevada and Legal Aid Main Office are at the same number: 383-9696.

A second Legal Aid, Nevada Legal Aid and Tenants Rights are at 391-9505. A third Legal Aid and Legal Aid of Southern Nevada are at 676-1000 and Legal Aid Alternative is at 452-3172.

"This is another way you can tell these people are scammers. A properly licensed legal office won't be using all these different names for the same numbers," Buckley said.

The suit said the recorded message had allegedly been changed at least three times since August 1999 and offered a menu of legal services. Callers with eviction queries were allegedly instructed to call another number and to pay between $300 to $600 for legal services.

The plaintiffs said Chapman contacted Woods, then a tenant renting an apartment from Casa Del Sol Apartments at 5100 O'Bannon Drive in Las Vegas, and told her he could postpone her eviction for two months without her paying rent if she paid a $325 fee. Chapman also contacted Jones and told her to pay a $300 fee if she wanted to delay her eviction.

The suit said Woods and Jones paid the fees at the 500 North Rainbow office, and received some paperwork from Chapman's assistant whom they were instructed to meet at a 7-Eleven store.

The plaintiffs said both women, who later contacted Chapman upon discovering he had given them bankruptcy documents, were allegedly told they would have to file the bankruptcy documents with an additional $175 fee to delay their evictions.

The suit said Woods, who didn't want to file for bankruptcy, was allegedly instructed by Chapman to lie to the constable's office on Sept. 12, 1999, by saying she had never received the five-day notice to quit or pay rent and that she was going to file papers that day to stop the eviction.

The suit alleged the defendants advised Jones to file for bankruptcy in order to seek the automatic stay protection of the bankruptcy court and to voluntarily dismiss the action once the stay expires. Jones, who said she had difficulty paying rents and later paid the defendants another $300 for more legal help, allegedly never heard from them again despite repeated phone calls.

The State Bar said the defendants in their alleged attempt to extract funds from the plaintiffs violated Nevada and federal bankruptcy law by failing to advise the plaintiffs of the consequences of filing a bankruptcy to stop an eviction, or of the possibility of incorporating other debts to the bankruptcy petition or exploring other legal options as a remedy to an eviction proceeding.

"What the defendants have done was file an incomplete bankruptcy. When they were told to submit additional documents, they didn't do it so that the bankruptcy petition would be dismissed," Ebihara said. "They listed the landlord but not the other creditors. And if these were not listed, the debts won't be included and therefore not discharged."

"One of the long term consequences of filing for bankruptcy is that this will stay on your credit report and damage your credit. A legitimate lawyer will list the options and pros and cons of filing for bankruptcy and give client the opportunity to make an knowledgeable choice," he said.

"The defendants' acts and practices are ... illegal and contrary to the public interest and public policy of the State Bar of Nevada," the plaintiffs said in the suit.

"This is particularly true because fundamental legal rights and obligations of Nevada citizens, many of whom are in desperate need of competent legal counsel, are being affected and dealt with by persons who are subject to neither the Rules of the Supreme Court of the State of Nevada nor the regulatory disciplinary proceedings of the State Bar of Nevada," they said.

Chapman declined comment on the allegations. Lustig could not be reached.

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